In a surprise move, the city beat rivals including Blackpool and the Dome in London with its £265m plan to regenerate a part of east Manchester with a gambling mecca which would offer up to 70 gaming tables and 1,250 slot machines with million pound prizes.

The independent Casino Advisory Panel , appointed by the government, chose Manchester from a shortlist of seven sites, also including Glasgow, Newcastle, Cardiff and Sheffield.

The decision marks an incredible turnaround after Manchester finished bottom of the provisional shortlist - bookmakers had made the city only a 15-1 chance.

But the decision is also a massive blow for Blackpool, which was hoping to transform the resort with the massive investment a super-casino would bring.

Media representatives were caught on the hop, with camera crews waiting expectantly in Blackpool and London for the verdict.

Manchester's successful bid promises 2,700 jobs at Sportcity in Beswick, near the City of Manchester Stadium. It will provide a hotel, a swimming pool, restaurants and bars. Culture Secretary Tessa Jowell is likely to welcome the decision in the Commons later today, despite fears the super-casino could lead to gambling and attract criminals and an opinion poll which gave the thumbs down to the plan for 17 new casinos.

Sizes

As well as the large `regional' casino there will be eight `large' casinos, with up to 150 gaming machines with jackpots up to £4,000 and eight `small' casinos with 80 machines.

The other favourite, London's Greenwich bid, based on the former Millennium Dome, attracted criticism last year when it emerged Deputy Prime Minister John Prescott stayed at the US ranch of Dome owner Philip Anschutz.

Labour MP Nick Raynsford complained of a `campaign of vilification' against the plans to turn the Dome, which is in his constituency, into an entertainments complex.

There are 138 casinos operating in Britain and last year visitors exchanged £4 billion worth of gaming chips in them.

The government had originally planned for between 20 and 40 super-casinos to encourage the regeneration of run-down seaside resorts but, after opposition from Tories, Liberal Democrats and church leaders, the number was cut to just one `test' site.

'Strong case'

City chief executive Sir Howard Bernstein said: "We always had a very strong case and I think the turning point came during the examination in public.

"We showed we had the best overall offer, the best delivery capacity, the best test bed and we put our case well.

"It is just another stage in our journey. It will bring jobs and make the city a destination centre.

"The planning process will start immediately and I think we could be on site within 12 months and the casino operational within three years."

City council leader Sir Richard Leese said: "This is fantastic news for Manchester and the region.

"We have always believed that Manchester offers a robust test for the successful implementation of this major leisure and tourism development."